Once you start saving, make sure you have the proper asset allocation. This starts with selecting the right amount of stocks and bonds that fit you and your goals. It’s more than just a risk tolerance questionnaire. It’s knowing how fast you want to get to your goals and what risks are acceptable to you along the way. Everything is a trade-off but asset allocation – the balance between riskier assets (stocks) and less risky assets (bonds or cash equivalents) is what matters most in determining the risk and return for your portfolio.

There are no shortcuts to building wealth. You never know what market segment will outperform or underperform from year to year, so don’t try to guess by timing the market. You are better served by setting up your balance to “fit” you and your goals and then rebalance regularly. Don’t fall in love with your company stock. Remember, in a well-diversified portfolio, there should always be something down or underperforming your other investments each year.